Optimal Design and Planning of Biomass-to-Biofuel Supply Chain Considering Economic Dimension under Strategic and Tactical Levels: Case Study in Ethiopia

Biofuel derived from biomass on account of being renewable energy source and having high potential to substitute fossil fuels, have attracted considerable interest in both developed and developing countries like Ethiopia. However, the lack of optimal design and planning of the biomass-to-biofuel projects in countries like Ethiopia results in poor economic attractiveness of the sector. Therefore, this study presents a novel economic optimization model to design and plan biomass-to-biofuel supply chain (BBSC) at strategic and tactical level simultaneously. The problem is formulated as spatially explicit, multi-feedstock, multi-period and multi-echelon mixed integer linear programming model that seeks to maximize the NPV of the entire supply chain. The proposed model covers all the entities along the supply chain including biomass cultivation, feedstock pretreatment, conversion into bioethanol or biodiesel, as well as distribution, transportation and storage of the biomass, products and byproducts. A county-level case study in Ethiopia is provided to demonstrate the applicability of the model. Results show the effectiveness of the model as a quantitative decision-making or planning tool to design different BBSC configurations. Optimal location, technology, and capacity of the preprocessing facility, biorefinery and biofuel distribution centers are determined simultaneously with inventory levels, material flows and transportation capacities between network nodes of the supply chain.